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What you should know: Goldman Sachs forecasts a modest three percent annualized return for the S&P 500 over the next decade (one percent after inflation) and suggests there’s over a 70 percent chance U.S. Treasuries could outperform stocks in this period. While such predictions are challenging to make, Goldman’s outlook reflects potential economic headwinds similar to those seen during past financial crises like the Great Depression, 1970s stagflation, and the 2008 financial crisis, where 10-year stock returns were historically low.

Historically, the S&P 500 has outperformed bonds 83 percent of the time over 10-year periods, though there’s a 17 percent chance of bonds winning over stocks. This outlook underscores the importance of diversification as protection against the unpredictability of market returns. Large-cap growth stocks have driven recent market performance, but over time, other asset classes—such as small-cap, foreign, and value stocks—should play a valuable role.

Above all, remember this: You may experience moments during extended bull market runs when diversification seems less effective; however, it remains essential for long-term resilience across varying market cycles.